Holding

A landlord must allege and prove a specific, non‑bona‑fide denial of title and wilful default; absent such proof, eviction cannot be ordered.

Summary

The landlords sought eviction of the tenants under Section 10(2)(vii) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, alleging non‑payment of rent and a denial of the landlords' title that was not bona‑fide. The tenants counter‑claimed that the municipal corporation, not the landlords, was the true owner and that they had paid rent to the landlords, while also disputing the rent rate. The Rent Controller and the Appellate Authority found no wilful default and held the denial of title to be bona‑fide, dismissing the eviction applications; the High Court reversed this, but the Supreme Court reinstated the lower findings. The Supreme Court held that a landlord must plead a specific ground of denial of title in the eviction petition and that mere non‑payment of rent without wilful intent does not constitute a ground for eviction. It also clarified that a denial of title must be "not bona‑fide" to be a valid ground, and the tenants' denial was found to be bona‑fide. Consequently, the appeals were allowed and the eviction petitions dismissed, with directions on rent payment and pending fair‑rent proceedings.

Issues considered

Whether the tenants' non‑payment of rent amounted to wilful default under Section 10(2) of the Act.
Whether the tenants' denial of the landlords' title was "not bona‑fide" within the meaning of Section 10(2)(vii).
Whether the eviction petition properly pleaded the ground of denial of title and whether the landlord bore the burden of proof.
Whether the Controller or the Civil Court should determine the question of title in eviction proceedings.

Legislation cited

Indian Evidence Act, 1872s. 116
Tamil Nadu Buildings (Lease and Rent Control) Act, 1960s. 10(2)(vii)

Subjects

rent controlevictionwilful defaultdenial of titlebona fideestoppelTamil Nadu Buildings Actlandlord‑tenant disputecivil procedurefair rent

Judgment

J.J. LAL PVT. LTD. AND ORS. A
v.
M.R. MURALI AND ANR.

FEBRUARY 8, 2002

[R.C. LAHOTI AND BRIJESH KUMAR, JJ.] B

Rent Control and Eviction:

Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 Section
/0(2)(vii). C
Eviction-Grounds-Default in payment of rent-Non-payment of rent by
the tenant is not enough-It must be shown that default in payment of rent is
wilful, intentional, calculated and conscious with full knowledge of legal
consequences flowing therefrom-Landlord not properly serving notice of D
demand of rent or uncertainty as to the title of the property due lo rival
claim-In such cases non-payment of rent for certain period does not amount
lo wilful default-Ground of eviction not available lo the landlord.

Denial of /i11/e-Plea of denial of title of landlord 'not bonajide '-
Operates as ground for eviction.
E
Denial of title-Adjudication of-Rent Controller could decide for the
limited pwpose of finding out as to whether a ground of eviction is made
out-But question of title should be left open to be determined by Civil Court
as also the Eviction Petition so as lo avoid multiplicity oflitigation- -Legislative
intention. F
Evidence Act, 1872-Section I 16-Rule ofEstoppel-Tenant is estopped
from denying the title of the landlord during the continuance of tenancy.

Landlord-respondents initiated eviction proceedings against the
appellant-tenants from the suit premises, before the Rent Controller on the G
ground of default in making payment of rent by the tenants for certain period.
In their written statement tenants submitted that there was a dispute as to
the rate of rent and quantum of arrears of rent that they were prepared to
pay the rent nt the existing rate. Appellant-tenants filed an additional counter
affidavit wherein it was submitted that Municipal Corporation of Madras had
919 H
920 SUPREME COURT REP0'RTS [2002] I S.C.R.

A earlier granted a long term lease in respect of suit premises in favour of one
'X' who expired and subsequently in favour of landlords; that since the term
of the lease had expired, Corporation initiated steps to create a lellse directly
in favour of the actual occupants, and so the suit for recovery of possession
from tenants was not maintainable. Rent Controller dismissed the suits
holding that tenants were not defaulters. Landlords preferred appeals.
B Appellate Authority framed two issues for decision, viz., (i) wilful default, if
any, committed by the tenants and (ii) if tenants were liable to be evicted for
their denial of landlord's right over the property being not bonafide and
concluded that there was no wilful default on the part of the tenllnts in
payment of rent and that denial of title of the landlords was bonafide. On these
C findings the appeals were dismissed. Landlords preferred revision petition,
and High Court reversed the decision of the Rent Controller. Aggrieved,
tenants filed the present appeals.

Allowing the appeals, the Court

D HELD: I. To claim eviction under Section 10(2Xvii) of the Tamil N2du
Buildings (Lease and Rent Control) Act, 1960, it is for the landlord to allege
that denial of title or claim was not bonafide. Once the landlord has 2dduced
evidence sustaining the ingredients of grounds for eviction, the onus would
shift to the tenant to show that either there was no denial or claim attracting
E applicability of Clause (vii) or the same was bonafide. But in the instant case,
the eviction petition does not contain any averment making out a case of denial
of landlord's title by the tenants. (928-F-G-H)

Majati Subbarao v. P. V.K. Krishna Rao (Deceased) by Lrs., [1989) 4 SCC
732 and Om Prakash Gupta v. Ranbir B. Goyal, (2002) I SCR 359, referred to.
F
2. A plea taken by the defendant in written statement can itself be made
a ground for allowing relief to the plaintiff subject to well known limitations;
(i) The plea taken in the written statement should by itself be enough as
furnishing a ground for relief to the plaintiff. (ii) The plea taken by the
G defendant does not stand in need of any further pleadings being joined by
the party; (iii) an issue is framed and put to trial unless the facts of the case
show that the parties actually went to trial fully alive to the real issue between .
them and had opportunity of adducing evidence. [932-F-GJ

Nagubai Amma/ and Ors. v. B. Shama Rao and Ors., [1956) SCR 451,
H relied on.
J.J. LAL PVT. LTD. v. M.R. MURALI 921
Firm Sriniwas Ram Kumar v. Mahabir Prasad and Ors., (1951] SCR 277; A
.._ Om Prakash Gupta v. Ranbir B. Goyal (2()02) 1 SCR 35911nd Majati Subbarao
v. P. V.K. Krishna Rao (Deceased) by LR.s. (1989) 4 SCC 732, referred to.

3.1. As a general rule the vulnerability of denial of title by the tenant
shall be tested by reference to rule of estoppel contained in Section 116 of the
Evidence Act which estoppes the tenants from denying the title of the landlord B
at the commencement of tenancy and the estoppel continues to operate so long
as the tenant does not surrender possession over the tenanted premises to the
landlord. The tenant is not estopped from denying the title of the landlord if
it comes to an end subsequent to the creation of the tenancy nor is he estopped
from questioning the derivative title of a transferee of his landlord. C
(933-A-B)

3.2. To operate against the tenant as providing a ground for eviction
under Section 10 of the Act a mere denial of the title of the lnndlord is not
enough; such denial has to be 'not bonaflde'. To 11SCertain whether an essertion
of denial of landlord's title by the tenant was bonafide or not, all the D
surrounding circumstances under which the assertion was made shall have
to be seen. [933-C-D)

3.3. In the instant case, tenants have stated that the ultimate owner of
the property was the Municipal Corporation and they had expressed their
willingness to pay rent to the Municipal Corporation under threat of eviction E
solely for the purpose of protecting their own possession over the premises.
They have neither disowned the title of the landlords at the inception of the
tenancy nor have set up any title in themselves nor attorned in favour of
Municipal Corporation. Therefore, no case of eviction on the ground of
tenants' denial of landlord's title "not bonafide" is made out. [934-B-C) F
3.4. A decree on the ground of denial of landlord's title by the tenant
and such denial being not bonafide could not have been a ground for directing
eviction of the tenant, in the instant case. The application for eviction filed
by the landlord does not plezd such a cause of action setting out material facts
and as providing a ground for relief of eviction. The plea taken by the tenants G
in their 11dditional counter does not by itself amount to denial of title so as to
render them vulnerable to eviction by attracting applicability of Section
10{2)(vii) of the Act. (934-D-E)

3.5. Before the Rent Controller, none of the parties were alive to the
fact that alleged denial of title by tenants could possibly be clicked by the H
922 SUPREME COURT REPORTS [2002] I S.C.R.

A landlords as ground for eviction. Appellate Authority for the first time
formulated 11 point at issue touching this ground and held in favour Qf •Ile
tenants holding that such denial was bonafide. Appellate Authority was not.
inclined to frame an issue; otherwise it ought to have been tried on the lines
laid down in Order 41, Rule 25 of the C.P.C. But High Court shifted the
emphasis and treated the denial of title by tenant as primary ground for
B eviction and proceeded to decide the same. Thus what was not in issue before
the trial Court at all became the core issue on which the High Court has
founded its decision. This is not only violative of the established procedure
for civil trials but also violative of principles of justice and fair play. Tenants
.
have been certainly prejudiced in their defence and, therefore, availability of
C that ground for eviction of tenants cannot be sustained.
[934-G-H; 935-A-B)

3.6. Legislative intent appears to be that denial of title can be decided
by the Controller for the limited purpose of finding out whether a ground of
eviction is made out but the question of title should be left to be determined
D by the Civil Court, so as to avoid multiplicity of suits and proceedings.
[935-H; 936-A)

4. Non-payment of rent by the tenant is not enough; there should be a
'wilful default' so as to make out a ground for eviction. In the instant case it
is the landlord's own statement that rent was being collected from the tenants
E by the landlord, once in two months. Then there is either the absence of notice
or a doubt about the service of notice on the tenants from the landlords
demanding payment of rent. Additionally, a sister of landlord was pressurising
the tenants to make apportionment of rent in her favour and the Municipal
Corporation was holding out threat of eviction if arrears as to premises were
F not directly paid to it. These two events could have reasonably caused a
wavering in the mind of tenants as to whom to pay. In this state of facts non-
payment of rent cannot be enough to brand the tenants as wilful defaulters.
[936-E; 937-B-C)

S. Sundaram Pillai etc. etc. v. V.R. Pattabiraman etc. etc., (1985) l SCC
G 591; Prem Chand Ranka v. A Vasanthraj Khatod and Ors., [1992) l SCC 369
and D.C. Oswal v. V.K. Subbaiah and Ors., (1992) l SCC 370, relied on.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3429-34~2
of 1998. '
H From the Judgment and Order dated 24.12.97, 19.3.98 of the Chennai
J.J. LAL PVT.LTD. v. M.R. MURALI [ R.C. LAHOTI, J.] 923
·High Court in C.R.P. No. 2861 and 2876/97, R.P. Nos. 4 and 5 of 1998. A
Govind Das, Sujit Singh, Rajesh Dubey and S.B. Upadhyay for the
Appellant.

M.N. Rao, T. Madasamy and T. Raja for the Respondents.
B
R. Mohan, and V.G. Pragasam for the lntervenors.

The Judgment of the Court was delivered by

R.C. LAHOTI, J. The landlord-respondents initiated proceedings for
eviction of the tenant-appellants from the suit premises described as Door C
No.244 and 264, Walltax Road, Chennai on the ground available under clause
(i) of sub-section (2) of Section 10 of the Tamil Nadu Buildings (Lease and
Rent Control) Act, 1960 (hereinafter, 'the Act' for short), by applying to the
Controller for a direction in that behalf. It was alleged in the application for
eviction filed on 6th April, 1989 that the tenants did not pay the rent of
·premises Door No.264 for January and February, 1989 at the rate of Rs. D
1,000 per month and for premises Door No.244 for the month of February,
1989 at the rate of Rs. 4,000 per month. The tenants, in their written statement,
denied their being defaulters and submitted that there was dispute as to the
rate at which the rent was payable and also as to the quantum of arrears,
though, they were agreeable and always prepared to pay the rent at which it E
was previously paid but for the exaggerated and inflated demand of the
landlords.

It appears that the suit premises are owned by the Municipal Corporation
of Chennai and are held by the landlords as allottee of the Municipal
Corporation. The landlords have further leased out the premises to the tenants F
(appellants before us). Thus, there are three persons associated with the suit
premises-the Municipal Corporation, their allottees (i.e. the respondents),
and further lessees inducted by the allottees i.e. the appellants. We are not
concerned with any controversy between the Municipal Corporation and its
allottees. The Municipal Corporation was never a party to the litigation and G
has sought for intervention at the hearing before this Court but the intervention
is being denied for the reasons which we would be stating at the end of this
judgment. We would, therefore, confine ourselves to the controversy arising
for decision between the parties before us and for that purpose, in this
judgment, the respondents shall be referred to as 'landlords' and the appellants
shall be referred to as 'tenants'. H
924 lOUPREME COURT REPORTS [2002) I S.C.R.

A In the written statement, the tenants confined themselves to denying
their being defaulters and raising dispute as to the rate of rent and quantum
of arrears. However, an anxiety for protecting their possession over the suit
premises and zeal for giving a rebuff to the landlords, impelled them to file
an additional counter in September 1993, in addition to their counter filed by
B way of written statement in February 1990. In the additional counter, it was ·
submitted that the tenants had reliably learnt, on making enquiries from the
Municipal Corporation of Madras, that long term lease was granted by the
Corporation in favour of late M.B. Ramachandra Naidu, who expired in the
month of March 1982. With his death, the lease came to an end. Even the
term of lease by Municipal Corporation in favour of the landlords had expired •
C and the Corporation had taken steps to create a lease directly in favour of the
actual occupants and the respondents had agreed to pay the rent to the
Municipal Corporation w.e.f. 1.4.1982 and onwards. For these reasons, it was
submitted that the proceedings for recovery of possession from the tenants
were not maintainable. This additional counter, far from defending the tenants,
has proved to be a potent troubleshooter for the tenants and the bone of
D contention in this litigation as will be noticed shortly hereinafter. We may
hasten to add to the factual statement that sometime after the month of March
1993, one of the partners of the tenants was delivered a notice by the Municipal
Corporation which reads as under:-

E "NOTICE

Corporation of Chennai

Land Revenue Department.

Ref.: 8/1737/93 Date:
F
In your letter dated 26.03.93 you have confirmed that you are
occupying the premises No. 244, Walltax Road, (4110 sq.ft.) belonging
to Corporation of Chennai from 1.4.82.

The lease period has already elapsed. Moreover you have agreed
G to pay the lease amount by your letter dated 26.3 .93.

Since you are enjoying the premises belonging to Corporation of
Chennai the following amount is due from you:

(1.4.82 to 31.3.89) prior to 1989 162.96
H
J.J. LAL PVT. LTD. v. M.R. MURALI [R.C.LAHOTI,J.) 925
1989-90 35962.50 A
1990-91 95900.00

1991-92 113162.00

B
245187.46

Hence you have to pay the amount of Rs. 245187.46 before 15.4.93
... to the Corporation Treasury, failing which the above premises
belonging to Corporation of Chennai will be auctioned to public. C
For Commissioner

To

Surendar Kumar Chouraria, D

.. 40, Ormes Road,

Kilpauk, Madras -10.

Though, the landlords had filed two applications for eviction in respect E
of two premises (i.e. Door Nos. 244 and 264 ), both the applications were
tried together and disposed of by a common judgment dated 15.12.1995 by
the Controller. The Controller found, vide para 9 of its order, that the tenants
have been remitting the agreed rental amount to the landlords which factum
.. is borne out by the accounts produced by them. It was an admitted position
that the taxes due and payable by the landlords were being remitted by the F
tenants to the Corporation on behalf of the landlords. However, a sister of
one of the landlords had filed a suit in the High Court claiming a share in the
suit property while the Corporation had issued notice to the .tenants demanding
payment of rent. Barring the period of two months, there was no occasion for
non-payment of rent. FurL'ter, it was not properly proved as to whether the G
landlords had demanded the payment of arrears by issuance of notice to the
. tenants. The Controller held that there was a doubt that the application for
eviction was filed for pressurizing the tenants because of disputes other than
default in payment of rent. In the result, the Controller held that the tenants
were not defaulters and not liable to be evicted. The applications for eviction
were directed to be dismissed. H
926 SUPREME COURT REPORTS [2002] I S.C.R.

A The landlords preferred appeals. In its order dated 24.12.1996, the
Appellate Authority framed two points for decision, viz. (I) whether the
respondents committed wilful default, and (2) whether the respondents were
liable to be evicted due to their denial of appellants' right over the property
being not bona fide. The Appellate Authority, on the question of default in
B payment of rent, reiterating the circumstances found proved by the Controller,
felt impressed by an admission made by the landlord PW! in his statement
that the tenants used to pay rent once in two months and that the landlord or
her father used to go to the tenants' firm to collect the rent. On totality of the
facts and circumstances, the Appellate Authority concluded that there was no
willful default on the part of the tenants in payment of rent. The Appellate
C Authority also entertained a doubt if the tenants had at all received any notice
from the landlords demanding payment of rent. As to the second point for
decision, the Appellate Authority concluded that the denial of title of the
landlords by the tenants was bona fide. On these findings, the Appellate
Authority dismissed the appeals and confirmed the judgment of the Controller.

D The landlords preferred civil revisions in the High Court. The High
Court has, by its common order, disposing of the four civil revision petitions,
·reversed the judgment of the Controller and the Appellate Authority. A perusal
of the impugned judgment of the High Court shows that the High Court also
dealt with the same two points for determination as were framed by the
E Appellate Authority in view of the two submissions made on behalf of the
landlord-petitioners before it. However, vide para 19 of its judgment, the
High Court observed-"before we consider the ground for default, the other
ground of denial of title should be considered". The High Court then embarked
upon considering the plea of the landlords that the tenants had indulged into
unjustifiably denying the landlords' title which provided a ground for eviction
F of the tenants as denial of landlords' title could not be said to be bona fide.
This finding of the High Court cast its shadow on its appreciation and reasoning
relating to the other issue and led it into concluding that the default in payment
of rent was based upon a 'series of attempts' to deprive the landlords of their
lawful rights which was malafide and, therefore, there was no hesitation in
G holding that the default was willful though it was for a short period only. In
the end, the High Court has directed the tenants to be evicted. These appeals
have been filed by the tenants by special leave feeling aggrieved by the
judgment of the High Court.

We have heard Shri Govind Das, Senior Advocate, for the tenant-
H appellants and Shri M.N. Rao, Senior Advocate, for the landlord-respondents.
J.J. LAL PVT. LTD. v. M.R. MURALI [ R.C. LAHOTI, J.) 927

Having heard them, we are satisfied that the judgment of the High Court A
cannot be sustained and the appeals have to be allowed, followed by certain
directions to the tenants, which, in view of the prolonged litigation between
the parties, this court must make so as to dispense substantial justice to the
parties and protect their interests.

The decision of the case hinges upon the two questions framed by the
B
Appellate Authority and we propose to deal with them but in the same order
in which they were dealt with by the High Court. Indeed the forceful
submissions made by the learned senior counsel for the parties have also
i' centred around those two issues highlighting very many aspects touching the
said questions. c
Before we proceed further, it would be relevant to extract and set out
the following provisions of the Act:-

10. Eviction of tenants. (!)A tenant shall not be evicted whether in D
execution of a decree or otherwise except in accordance with the
p,rovisions of this section or sections 14 to 16:
•
.• Provided that nothing contained ip the said sections, shall apply
to a tenant whose landlord is the Government.
E
Provided further that where the tenant denies the title of the
landlord or claims right of permanent tenancy, the Controller shall
decide whether the denial or claim is bona fide and if he records a
finding to that effect, the landlord shall be entitled to sue for eviction
of the tenant in a Civil Court and the Court may pass a decree for
eviction on any of the grounds mentioned in the said sections, F
notwithstanding that the Court finds that such denial does not involve
forfeiture of the lease or that the claim is unfounded.

(2) A landlord who seeks to evict his tenant shall apply to the
Controller for a direction in that behalf. If the Controller, after giving G
the tenant a reasonable opportunity of showing cause against the
application, is satisfied -

(i) that the tenant has not paid or tendered the rent due by him
in respect of the building, within fifteen days after the expiry of the
time fixed in the agreement of tenancy with his landlord or in the H
928 SUPREME COURT REPORTS [2002} I S.C.R.

A absence of any such agreement, by the last day of the month next
following that for which the rent is payable, or

xxx xxx xxx xxx

(vii) that the tenant has denied the title of the landlord or claimed
B a right of permanent tenancy and that such denial or claim was not
bona fide, the Controller shall make an order directing the tenant to
put the landlord in possession of the building and if the Controller is
not so satisfied, he shall make an order rejecting the application.

c Providea that in any case falling under clause (i) if the Controller
is satisfied that the tenant's default to pay or tender rent was not
willful, he may, notwithstanding anything contained in section 11,
give the tenant a reasonable time, not exceeding fifteen days, to pay
or tender the rent due by him to the landlord up to the date of such
payment or tender and on such payment or tender, the application
D shall be rejected."

First, the question-whether the tenants are liable to be evicted on the .
ground of denial by them of the title of landlords, the denial being not bona
fide, within the meaning of clause (vii) of sub-section (2) of Section 10 of
E the Act?

The scheme of the Act is that an application for eviction of tenant has
to be filed before the Controller. One of the objects sought to be achieved by
the Act is the prevention of unreasonable eviction of tenants. Needless to say
it is for the landlord to allege and prove a ground for eviction entitling him
F to an order of eviction and disentitling the tenant of his protection enjoyed
under the Act. To claim eviction under Section I 0(2Xvii), it is for the landlord
to allege that the tenant has denied the title of the landlord or claimed a right
of permanent tenancy and that such denial or claim was not bona fide. Once
the landlord has adduced evidence substantiating the twin ingredients of the
G ground for eviction, the onus would shift on the tenant to show that either
there was no denial or claim attracting applicability of clause (vii) or the
same was bona fide. The application for eviction, in the case before us, does
not contain any averment making out a case of denial of landlords' title by
the tenants. The learned senior counsel for the landlords candidly admitted
that the claim fo1 eviction, as originally filed, was not founded on the plea
H of tenants' denial of landlords' title in as much as such denial did not precede
J.J. LAL PVT. LTD. v. M.R. MURALI [ R.C. LAHOTI, J.] 929

the filing of application but the same became available to the landlord on the A
filing of the additional affidavit in September 1993 by the defendant-tenants
during the pendency of the proceedings before the Controller. It was submitted
that landlord can justifiably demand eviction of tenant on the plea raised in
the written statement as that plea in itself is sufficient to provide availability
of a ground for claiming eviction of tenant to the landlord. We are not B
impressed.

We may straightaway refer to a decision of this Court in Majati Subbarao
v. P.V.K. Krishna Rao (Deceased) by LRs., [1989] 4 SCC 732, which was a
case under Andhra Pradesh Buildings (Lease, Rent and Eviction) Control
Act, 1960. Eviction petition was filed on the ground of bona fide requirement C
of the landlord. In the written statement, the tenant denied the title of landlord
which was sought to be made a ground for eviction submitting that such
denial made out a ground for eviction under Section I 0(2)(vi) of Andhra Act.
This Court, rejecting the argument that the denial of title must be anterior to
the proceedings for eviction, held that even a denial of a landlord's title by
the tenant in the written statement in an eviction petition under the Rent Act D
furnishes a ground for eviction and can be relied upon in the very proceedings
. in which the written statement containing the denial has been filed. The
reasoning which appealed to this Court was that to insist that a denial of title
in the written statement cannot be taken advantage of in that suit but can be
taken advantage of only in a subsequent suit to be filed by the landlord, E
would only lead to unnecessary multiplicity oflegal proceedings as the landlord
would be obliged to file a second suit for ejectment of the tenant on the
ground of forfeiture entailed by the tenant's denial of character as a tenant
in the written statement. The submission of the learned counsel for the tenant
was that in any event the landlord had failed to apply for amendment· of his
plaint and incorporate the ground of denial of title therein as he was bound F
to do in order to get relief on that ground which had arisen after the eviction
petition was filed. This Court held:-

"We agree that normally this would have been so but, in the present
case, we find that the Trial Court, namely, the Rent Controller,framed G
an issue as to whether the tenant's denial of the landlord's title to the
schedule property including the said premises was bona fide. The
parties went to trial on this clear issue and the appellant had full
knowledge of the ground alleged against him. It was open to him to
have objected to the framing of this issue on the ground that it was
not alleged in the eviction petition that the appellant had denied the H
930 SUPREME COURT REPORTS [2002] I S.C.R.

A title of the respondent and that the denial of title was bona fide. If he
had done that the respondent could have well applied for an • ·
amendment of the eviction petition to incorporate that ground. Having
failed to raise that contention at that stage it is not open now to the
appellant to say that the eviction decree could not be passed against
him as the ground of denial of title was not pleaded in the eviction
B petition."

[emphasis supplied]

Recently in Om Prakash Gupta v. Ranbir B. Goyal, (Civil Appeal
C No.5460 of 1999 decided on 18.1.2002), while dealing with power of the
Court to take note of subsequent events and then to grant, deny or modify the
relief sought for in the plaint, this Court has held:-

" ...... The ordinary rule of civil law is that the rights of the parties
stand crystalised on the date of the institution of the suit and, therefore,
D the decree in a suit should accord with the rights of the parties as they
stood at the commencement of the lis. However, the Court has power
to take note of subsequent events and mould the relief accordingly .
subject to the following conditions being satisfied : (i) that the relief,
as claimed originally has, by reason of subsequent events, become
inappropriate or cannot be granted; (ii) that taking note of such
E
subsequent event or changed circumstances would shorten litigation
and enable complete justice being done to the parties; (iii) that such
$Ubsequent event is brought to the notice of the Court promptly and
in accordance with the rules of procedural law so that the opposite
party is not taken by surprise. . . . . . . . . . . . . . . ..
F
Such subsequent event may be one purely of law or founded on
facts. In the former case, the Court may take judicial notice of the
event and before acting thereon put the parties on notice of how the
change in law is going to affect the rights· and obligations of the
parties and modify or mould the course of litigation or the relief so
G as to bring it in conformity with the law. In the latter case, the party
relying on the subsequent event, which consists of facts not beyond
pale of controversy either as to their existence or in their impact, is
expected to have resort to amendment of pleadings under Order 6 r
Rule 17 of the CPC. Such subsequent event the Court may permit
H being introduced into the pleadings by way of amendment as it would
j

J.J. LAL PVT. LTD. v. M.R. MURALI [ R.C. LAHOTI, J.) 931
be necessary to do so for the purpose of determining real questions A
~
in controversy between the parties."

In Firm Sriniwas Ram Kumar v. Mahabir Prasad and Ors., (1951]
SCR 277, this Court held that it was permissible for a plaintiff to rely upon
different rights alternatively and there is nothing in the Code of Civil Procedure
to prevent a party from making two or more even inconsistent sets of B
allegations and claim relief thereunder in the alternate. However, the question
was whether a relief based on such alternative case could be granted though
; not set 1>ut in the plaint. This Court proceeded to hold that the court cannot
grant relief to the plaintiff on a case for which no foundation was laid in the
' pleadings and which the other side was not called upon or had not an
opportunir1 to meet - is the rule. But when the alternative case, which the
c
plaintiff could have made, was not only adopted by the defendant in his
written statement but was expressly put forward in answer to the claim which
the plaintiff made in the suit, there would be nothing improper in giving the
plaintiff a decree upon the case which the defendant himself makes. A demand
for relief based on alternative case may cause surprise to the defendant but D
when the defendant himself pleads that case there will be no surprise to him,
no question of adducing evidence on those facts and no injustice could possibly
result to the defendant. To sum up the gist of holding in Firm Sriniwas Ram
Kumar's case is: If the facts stated and pleading raised in the written statement,
though by way of defence to the case of the plaintiff, are such which could
E
have entitled the plaintiff to a relief in the alternative, the plaintiff may rely
on such pleading of the defendant and claim an alternate decree based thereon
subject to four conditions being satisfied, viz., (i) the statement of case by
defendant in his written statement amounts to an express admission of the
. facts entitling the plaintiff to an alternative relief, (ii) in granting such relief
the defendant is not taken by surprise, (iii) no injustice can possibly result to F
the defendant, and (iv) though the plaintiff would have been entitled to the
same relief in a separate suit the interest of justice demand the plaintiff not
being driven to the need of filing another suit.

The Court may refuse to take note of a subsequent event though admitted
~
if the admitted facts are essentially required to be contained in the plaint and
G
... stand in need of something more being alleged and proved over and above
the admitted facts. Then the Court would not go in search for some imaginary
facts for founding the relief. In such a situation this Court in Hasmat Rai and
Anr. v. Raghunath Prasad, [1981) 3 SCC 103, held that the Court commits
a manifest error apparent on the record by upholding the plaintiff's case on H
932 SUPREME COURT REPORTS [2002] I S.C.R.

A the ground neither pleaded nor suggested in the pleadings.
...
Om Prakash and Ors. v. Ram Kumar and Ors.. [1991] 1 SCC 441 was
a landlord tenant dispute where the plaintiff-landlord claimed relief of a
direction to the tenant to put the landlord in possession on the ground of non-
payment of rent under Rent Control Law. This Court opined that under the
B relevant provisions in the Statute a landlord seeking eviction of the tenant is
required to make an application in this behalf. Such application is sustainable
on one of the grounds specified in the Act. When a specific allegation i~
made that the tenant is in arrears, the tenant is given an oppmtunity to pay •
or tender the rent within stipulated time and avoid an order of eviction. In the
C absence of definite allegation of non-payment of rent the tenant is not expected
to meet the case by being called upon to answer the claim. It was held that
a party cannot be granted a relief which is not claimed, if the drcumstances
of the case are such that the granting of such relief would result in serious
prejudice to the interested party and deprive him of the valuable rights under
the statute. In an action by the landlord the tenant is expected to defend only
D the claim made against him and if a cause of action arises to the landlord on
the basis of the plea set up by the tenant, in such action, it is necessary that
the landlord seeking to enforce that cause of action in the same proceedings
must do so by amendment or may have recourse to separate proceedings to
entitle the landlord to relief on the basis of such cause of action. The principle
E that the court is to mould the relief taking into consideration subsequent
events is not applicable in such cases.

A plea taken by the defendant in written statement can itself be made
a ground for allowing relief to the plaintiff subject to well known limitations.
The plea taken in the written statement should by itself be enough as furnishing
F a ground for relief to the plaintiff; the plea taken by the defondant does not
stand in need of any further pleadings being joined by the party; an issue is
framed and put to trial unless the facts of the case show that the parties
actually went to trial fully alive to the real issue between them and had
opportunity of adducing evidence, that is, to put it in other words, the parties
G know that the plea taken in the written statement too was subject matter of
trial and could form basis for relief to the plaintiff. In such case, though the
pleadings may be lacking or there may be failure to frame an issue or a ..
specific issue, the applicability of the law laid down by this Court in Nagubai
Amma/ and Ors. v. B. Shama Rao & Ors., [I 956] SCR 451 would be attracted.

H What amounts to denial of title, and whether such de:~ial is bona fide
1
J.J. LAL PVT. LTD. v. M.R. MURALI [ R.C. LAHOTI, J.] 933

or not, are the questions to be detennined in the facts and circumstances of A
.._ each case. As a general rule the vulnerability of denial of title by the tenant
shall be tested by reference to rule of estoppel contained in Section 116 of
~, the Evidence Act which estoppes the tenant from denying the title of the
landlord at the commencement of the tenancy and the estoppel continues to
operate so long as the tenant does not surrender possession over the tenancy
premises to the landlord who inducted him in possession. The tenant is not
B
estopped from denying the title of the landlord if it comes to an end subsequent
to the creation of the tenancy nor is he estopped from questioning the derivative
title of a transferee of his landlord. However, the rule of estoppel contained
in Section 116 of the Evidence Act is not exhaustive. To operate against the
tenant as providing a ground for eviction under Section 10 of the Act a mere c
denial of the title of the landlord is not enough; such denial has to be 'not
bona fide'. 'Not bona fide' would mean absence of good faith or non
genuineness of the tenant's plea. If denial of title by the tenant is an outcome
of good faith or honesty or sincerity, and is intended only to project the facts
without any intention of causing any harm to the landlord it may not be 'not
bona fide'. Therefore, to answer the question whether an assertion of denial D
of landlord's title by the tenant was bona fide or not, all the surrounding
• circumstances under which the assertion was made shall have to be seen. The
counter highlights the factum and contents of notice by the Municipal
Corporation served on the tenant, reproduced in the earlier part of this judgment
and the reaction of tenants to the threat coupled with temptation held out by E
Corporation. This notice by Municipal Corporation states the tenants having
infonned the Municipal Corporation that they were in possession of the
premises; that they had agreed to pay to the Corporation the lease amount
"" which was presumably in arrears on account of non-payment by their landlords
(i.e. the respondents); that the Municipal Corporation threatened the tenancy
• premises being subjected to public auction if the arrears were not cleared. F
This notice is by reference to letter dated 26.3.1993 sent by the tenants to the
Municipal Corporation which is not available on record. The landlords on
whom lay the burden of proving availability of the ground of eviction took
no steps for the production of this letter. The contents of the letter would
have provided vital evidence relating to the nature and manner of denial of G
title by the tenants and the bona tides of denial could have been inferred. The
~
High Court in its judgment has made a reference to "a series of attempts to
. deprive the landlords of their lawful rights" by tenants. The High Court
appears to have taken into consideration some other documents referable to
some other litigation between the parties which documents, in our opinion,
could not have been taken into consideration unless tendered in evidence and H
934 SUPREME COURT REPORTS [2002] I S.C.R.

A brought on record consistently with procedural law governing trial of civil
cases. There is yet another error committed by the High Court. So far as the
additional counter and contents of the notice by Municipal Corporation to the
tenants are concerned we do not think that a case of denial of title is made
out. In any case it cannot be considered to be 'not bona fide'. The tenants
have stated that the ultimate owners of the property were the Municipal
B Corporation and they had agreed their willingness to pay rent to the Municipal
Corporation under threat of eviction solely for the purpose of protecting their
own possession over the premises. They have neither disowned the title of
their own landlords at the inception of the tenancy nor have set-up any title
in themselves nor attorned in favour of the Municipal Corporation l,y
C voluntarily entering into direct tenancy with the Municipal Corporation by-
passing their own landlords. We are therefore clearly of the opinion that no
case of eviction on the ground of "tenants" denial of landlords' title "not
bona fide" is made out.

For several reasons, we are of the opinion that a decree on the ground
D of denial of landlord's title by tenant and such denial being not bona fide
could not have been a ground for directing eviction of tenant in the present
case. Firstly, the application for eviction filed by the landlord does not plead
such a cause of action, setting out material facts and as providing a ground
for relief of eviction. The plea taken by the defendant-tenants in their additional
E counter does not by itself amount to denial of title so as to render them
vulnerable to eviction by attracting applicability of Section 10(2)(vii) of the
Act. The basic question was whether the landlords themselves treated the
plea taken by the tenants in their additional counter as denial of their title and
if that be so the landlords should have amended their application for eviction
incorporating the avennent that the said additional counter amounted to denial
F of title of the landlords and such denial was not bona fide. Thereupon the
tenants would have had an opportunity of explaining the facts and
circumstances in which the additional counter, alongwith the pleas raised
therein, came to be filed and ifthat amounted to denial of landlords' title then
how did they propose to justify such denial as bona fide. Such pleas could
G have been subject matter of trial and evidence adduced by the parties followed
by expression of opinion by the Controller as to whether a ground for eviction
was made out or not. Before the Controller none of the parties were alive to
the fact that alleged denial of title by tenants could possibly be clicked by the
landlords as a ground for eviction. The Appellate Authority for the first time
formulated a point at issue touching this ground during the course of its
H decision and yet held in favour of the tenants holding that such denial was
1
J.J. LAL PVT. LTD. v. M.R. MURALI [ R.C. LAHOTI, J.) 935

bona fide. If at all the Appellate Authority was inclined to frame an issue A
then it ought to have been tried on the lines laid down in Order 41 Rule 25
of the Code of Civil Procedure. The High Court, as already stated, shifted the
emphasis and treated the denial of title by tenant as primary ground for
eviction and proceeded to decide the same. Thus what was not in issue before
the trial Court at all became the core issue on which the High Court has
founded its decision. This is not only violative of the established procedure B
for civil trials but also violative of principles of justice and fair play. The
tenants have been certainly prejudiced in their defence and, therefore,
availability of that ground for eviction of tenants in the present proceedings
• cannot be sustained.
c
Secondly, what has been done by the Appellate Authority and the
High Court does not also fit in the scheme of the Act in so far as this ground
is concerned. An application for eviction of tenant has to be filed before the
Controller for a direction in that behalf. Eviction may be sought by the
- landlord on the singular ground of the tenant having denied the title of the
landlord or coupled with other grounds. In such an application it is the D
,_ Controller who will decide whether such denial or claim was bona fide or
not. If the finding of the Controller is that the denial or claim by tenant was
not bona fide, the Controller shall make an order directing the tenant to put
the landlord in possession of the building. However, if the Controller does
not find the denial or claim to be not bona fide he shall deny the landlord's E
claim for eviction by making an order rejecting the application. Such finding
and rejection of landlord's application would not debar the landlord from
approaching the Civil Court for establishing his title. By having regard to
second proviso to sub-section (I) of Section I 0 of the Act, the bar on the
jurisdiction of Civil Court stands lifted and the landlord becomes entitled to
sue for eviction of the tenant in a Civil Court enabling such Civil Court to F
pass a decree for eviction on any of the grounds on which the Controller
could have directed eviction under Sections IO, 14 or 16, notwithstanding the
opinion formed by the Civil Court whether the denial of title by the tenant
had entailed forfeiture of the lease and notwithstanding the finding of the
Civil Court that the claim of permanent tenancy was unfounded. This is how G
any conflict of jurisdiction between Civil Court and Controller can be avoided
by construing Section I 0(2)(vii) and Section I 0( I) ~econd proviso
homogeneously and as part of one scheme. The legislative intent appears to
be.that denial of title can be decided by the Controller for the limited purpose
of finding out whether a ground of eviction is made out but the questions of
title should be left to be determined by the Civil Court. Once a question of H
936 SUPREME COURT REPORTS (2002] I S.C.R.

A title has arisen between a landlord and a tenant and such dispute is bona fide,
the doors of Civil Court are let open to the landlord and therein adjudication,
on grounds of eviction otherwise within the domain of Controller, is also
pennitted so as to avoid multiplicity of suits and proceedings. All the dispu!es
between landlord and tenant would be settled in one forum and the need' for
B prosecuting 'two separate proceedings before two fora would be eliminated.

On the pleadings and the material placed before us we cannot hold that
the tenants had denied the title of their landlords and whatever they had
stated in their additional counter was a denial 'not bona fide' so as to render
them liable for a direction to deliver possession to the landlords. In any case
C the present one is not a fit case where the landlords could have been allowed
relief on this ground without making requisite avennents by amendment in
the plaint. We make it clear that this finding shall, however, be treated as
confined to the facts of this case and would not preclude recourse to such
remedy as may be available to the landlords under the law and shall also not
inhibit a competent court seized with trial of such an issue to arrive at a
D different finding based on the pleadings and material brought before it.

The next question is whether the tenants by non-payment of rent for
one or two months can be said to have committed 'wilful default'. It was not
disputed at the hearing that simply non-payment of rent by the tenant is not
E enough; there should be a 'wilful default' so as to make out a ground for
eviction under the Act. The expression wilful default as employed in Section
I0(2) of the Act came up for the consideration of this Court in S. Sundaram
Pillai etc. etc. v. V.R. Pattabiraman etc. etc., [ 1985] I SCC 591. After dealing
with all the relevant aspects touching the expression and the setting in which
the expression has been employed in the Act, this Court held - "Thus, a
F consensus of the meaning of the words "wilful default" appears to indicate
that default in order to be wilful must be intentional, deliberate, calculated
and conscious, with full knowledge of legal consequences flowing therefrom.
Taking for instance a case where a tenant commits default after default despite
oral demands or reminders and fails to pay the rent without any just or lawful
G cause, it cannot be said that he is not guilty of wilful default because such
a course of conduct manifestly amounts to wilful default as contemplated
either by the Act or by other Acts referred to above." The course of conduct ..
prevailing between the parties for collecting rent is one of the relevant factors.
If the landlord has been accepting payments made in lumpsum for quite a
long time and in a situation where the landlord had consented to collect rent .
H for two to three months at a time, non-payment of rent for some little time
1
J.J. LAL PVT. LTD. v. M.R. MURALI (R.C. LAHOTl,J.) 937
cannot constitute wilful default, is the view taken by this Court in Premchand A
Ranka v. A. Vasanthraj Khatod and Ors., (1992] l SCC 369 and D.C. Oswal
v. V.K. Subbiah and Ors., (1992) I SCC 370. In the case before us we have
the landlord's own statement that rent was being collected from the tenants
by the landlords once in two months. Then there is either the absence of
notice or a doubt about the service of notice on <he tenant from the landlords B
demanding payment of rent. Additionally there are the facts that a sister of
landlord was pressurizing the tenants to make apportionment of rent in her
favour and the Municipal Corporation was holding out threat of eviction if
arrears as to premises were not directly paid to it. These two events could
have reasonably caused a wavering in the mind of tenants to whom to pay.
In this state of the facts non-payment of rent for one month in respect of one C
of the premises and for two months in respect of the other cannot be enough
to brand the tenants as 'wilful defaulters'.

For the foregoing reasons no case for eviction of the tenants is made
. out either on the ground of denial of title 'not bona fide' or on the ground
of tenants having committed wilful default in payment of rent. Petitions for D
eviction are liable to be dismissed.

However, it has been brought to our notice that there are several
litigations pending between the parties. One of them, relevant for our purpose,
is proceedings for fixation of fair rent. The rate of rent in the present E
proceedings have been found by the Appellate Authority and the High Court
to be at Rs. 1,000 and 4,000 respectively in respect of the two Doors. The
Rent Controller has found the fair rent of the premises to be still higher and
the Appellate Authority has further enhanced the rate of rent in proceedings
for fixation of fair rent applicable to the premises. The tenants have filed
civil revisions in the High Court alleging the fixation of fair rent to be on F
higher side. To give a quietus to the dispute as to the rate at which the tenants
should pay the rent of the premises we deem it proper to direct that the
tenants shall remain liable to pay rent at the rate of Rs. 1,000 per month in
respect of Door No. 264 and at the rate of Rs. 4,000 per month for Door No.
244 for the period for which contractual rate of rent applies. They shall also G
remain liable to pay fair rent as determined in the proceedings relating to its
fixation as and when they achieve a finality. So long as the proceedings for
determination of fair rent do not achieve a finality the tenants must comply
with the interim order dated 11.1.1999 whereby this Court directed the tenants
deposit rent at the rate of Rs. 13,331 in respect of Door No. 244 and at the
rate of 1,000 per month in respect of Door No. 264 with effect from 20.7.1998. H
938 SUPREME COURT REPORTS [2002] I S.C.R.

A The tenants, to be entitled to continue in possession of the premises, must
clear all the arrears of rent within an appointed time and then pay regularly,.
month by month, the rent which is legitimately due and payable by them.
.
For the foregoing reasons the appeals are allowed and the petitions for
eviction are directed to be dismissed. In view of the facts relating to the
B controversy as to the rate of rent noticed hereinabove, it is directed that the
tenants shall within a period of two months from today clear the arrears of '
rent calculated at the contractual rate for the period commencing January
1989 in respect of Door No. 264 and commencing from February 1989 in
respect of Door No. 244 and expiring with 19. 7.1998 and for the subsequent
c period from 20.7.1998 as per the direction made by this Court on 11.1.1999.
Either party may move an application to the Rent Controller for the purpose
of deciding if the arrears of rent stand cleared as above and to record a
finding in that regard. The tenancy shall continue if the arrears are cleared
as directed hereinabove. Once the arrears have been cleared, the tenants shall
then continue to pay or tender the rent month by month, as directed by this
D Court by its interim order dated l l. l .1999, until determination of fair rent
...
achieves a finality. Once that order becomes final it shall also be complied
within a period of two months thereafter. If the tenants commit default •
thereafter they shall be liable to be evicted by the Rent Controller on an
application being made by the landlords in this behalf. The appeals stand
E disposed of accordingly. Looking at the nature of the controversy arising for
decision we leave the parties to bear their own costs throughout.

I. A. Nos. 33-36 of 200 I

Hemlata Mohan, the applicant in these IAs seeks her impleadment in
F these proceedings submitting that cin the basis of the Will dated 30.1.1935 "
executed by her grand-father she is one of the landlords entitled to
apportionment of rent. A suit for establishment of her title and share in the .
property is pending in Madras High Court registered as Civil Suit No. 452
of 1988.

G I.A. Nos. 41 to 44 of 2001

These applications are filed by Municipal Corporation of Chennai
seeking its impleadment in the proceedings alleging that the two premises,
Door Nos. 244 and 264, subject-matter of litigation in these proceedings. are
H owned by it and therefore it needs to be impleaded as party in these appeals.
J.J. LAL PVT. LTD. v. M.R. MURALI [ R.C. LAHOTJ, J.] 939
Both the sets of applications raise such controversies as are beyond the A
scope of these proceedings. This is a simple landlord-tenant suit. The
relationship of Municipal Corporation with the respondents and their mutual
rights and obligations are not germane to the present proceedings. Similarly,
the question of title between Hemlata Mohan and the respondents cannot be
decided in these proceedings. The impleadment of any of the two applicants
would change the complexion of litigation and raise such controversies as are
beyond the scope of this litigation. The presence of either of the applicants
is neither necessary for the decision of the question involved in these
proceedings nor their presence is necessary to enable the court effectually
and completely to adjudicate upon and settle the questions involved in these
proceedings. They are neither necessary nor proper parties. Any decision in
these proceedings would govern and bind the parties herein. Each of the two
applicants is free to establish its own claims and title whatever it may be in
any independent proceedings before a competent forum. The applications for
impleadment are dismissed.

S.K.S. Appeals allowed.

>